Under Thailand’s previous government led by Prime Minister Prayut Chan-o-Cha, the original deal to purchase three submarines was made in 2017.
But only one of the submarine deals materialized and faced many snags along the way. It was projected to cost Thailand about 13.5 billion baht — or $367 million — for China’s construction of the S26T Yuan-class submarine and was put on hold amid the outbreak of COVID-19.
Hesitant to resume the deal, Thailand’s Defense Ministry under a new civilian-led government in October 2023 said it would no longer acquire the submarine because of Beijing’s inability to integrate a German-made diesel engine, a result of EU sanctions on China.
Benjamin Zawacki, author of Thailand: Shifting Ground Between the U.S and Rising China, said the events unfolded during a time of political uncertainty in Thailand.
“There were legitimate concerns about the engines. But the timing of that controversy coincided with a lot of controversy about the then-military government, whether or not it should be spending so much money in the midst of COVID-19 and the midst of post-COVID-19 economic recovery,” he told VOA. “It was trying to realize this submarine deal didn’t place it in a very good light politically.”
With Prime Minister Srettha Thavisin’s September 2023 rise to power, the submarine deal looked dead in the water — until Thai Defense Minister Sutin Klungsang’s May 21 announcement that Thailand’s Royal Navy had dropped demands for the German hardware, opting instead from Chinese-made CHD620 diesel engine, bringing the submarine deal back to life.
Not all about defense
Chinese tourism is key to Thailand’s tourist economy. China was Thailand’s largest trading partner in 2023, when it exchanged an estimated $135 billion in revenue.
Following the 2014 military coup, the U.S., which had worked closely with Thailand in the past, quickly denounced the seizure of power, withdrawing millions in military aid to Bangkok.
Since then, Bangkok and Beijing have tightened security ties. Thailand purchased more arms equipment in terms of value from China than the U.S. between 2016 and 2022, according to a report published in the Lowy Institute.
But Zawacki says questions remain about the necessity of a Thai attack submarine.
“Thailand doesn’t need it, and China doesn’t need Thailand to have it,” he told VOA. “Speaking purely from a security standpoint, it doesn’t make a great deal of sense for either China or Thailand, especially given the political controversy it’s caused.”
But, Zawacki added, the deal is “emblematic of the [Sino-Thai] military-to-military relationship” that has evolved since the 2014 coup. He also believes Beijing has persisted in finalizing the deal, which has since been modified to accommodate trade requirements on Thai military hardware procurement announced under Srettha’s new government.
“It’s been brought back I think primarily because it’s important to the Chinese,” Zawacki said. “I’m sure they were persistent. It’s a deal they want to get done for their own reasons.”
Greg Raymond, a senior lecturer at the Strategic & Defence Studies Center at Australia National University, echoes that opinion, saying it seems like Chinese pressure pushed the deal over the line.
“I don’t think [this is] what the current Srettha government was looking for,” he said, adding that Srettha’s administration in October 2023 briefly discussed the possibility of converting the deal into a procurement of Chinese-made naval frigates.
“They were looking for that trade to frigates or some other alternative, [but] they wanted to stand their ground,” he said of the new administration.
“They’ve been rolled,” he added, alluding to China pushing through the deal. “I think that’s pretty significant that whatever pressure or leverage the Chinese have applied has been successful.”
VOA has contacted governments of Thailand and China seeking comment on the submarine deal.
Beijing’s push for greater power in Southeast Asia, including the submarine deal with Thailand and docking its warships in Cambodia, won’t go down well in Washington, Raymond added.
“This … is something which I’m not sure the Thais have thought through in terms of how that’s going to be read by the U.S.,” he said. “I think it’s an increasingly tenuous posture of hoping to somehow achieve a balance and equidistance between China and the U.S.”
Zawacki says Washington’s main concern will be about where the Chinese-made submarine will dock.
“Will it be at Satthip Heap [Thailand Naval Base in Chonburi] which is where U.S. assets are also docked? And would that pose a potential [for] espionage and information gathering? In terms of the proximity of having Chinese or Chinese-built vessel and U.S. vessels in the same in the same port, that’s been their primary concern.”
Unveiling the newly modified deal to acquire the submarine last week, Thai Defense Minister Sutin Klungsang asked opposition leaders to wait until further details of the transaction were locked in place before asking questions about it.
According to the Bangkok Post, Sutin also said he could not share precisely when the finalized deal would be ready for review by Cabinet officials, adding that a trade component of the deal was still being negotiated.